A POTENTIAL has also developed with the C point yet to be set. I've marked the C point MAX level and that level will also serve as my stop loss because if prices declined past there, not only would it invalidate the but it would also break below the wave (b) (large blue one) of the overall correction and therefore would invalidate my wave count as it is and force me to re-assess.
MY TRADE PLAN
As mentioned, I am now LONG on this pair and expecting an up move into the completion of wave 4. While this up move may look like a trend move and I suspect many people will jump on and start calling for a long-term uptrend to develop, that's not my opinion. It is only a finishing corrective move to the consolidation pattern. But I'll deal with that if/when that happens. For now, I will be placing my stops below the wave (b) (large blue) and the MAX C point because if price drop below there, then my wave count could be wrong and I'll need to re-assess the overall situation. But more importantly, this trade has a better than 6:1 R;R ratio. So it's well-worth the risk. I have marked points along the way where I will probably take profits.
Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!
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i have 2 questions need your help:
1. is there a contradiction between (a)2015-8-28_(b)2015-9-4_(c) and (W)(X)(Y)?
2. wave (W) is a triangle like your chart,but wave w cant be a triangle in my rules, triangle wave usually appears in 4 wave, the wave b, the wave y (w - x, y) and z wave (w - x - y - x- z),what do you think it?
Question #2: Triangles occur in wave 4's as you say. That is correct. This entire corrective wave is a wave 4. Triangles can also be a part of a complex correction of a corrective wave as in wxy or wxyxz also as you say. But there is no rule stating that triangles can only appear in the y or z positions. Yes, it is more likely that the ending leg of a wxy or wxyxz will contain a triangle but triangles can appear in either the w, y or z positions.
My take on triangles and wave theory is this: First, triangles do not always need to be labeled as triangles depending on your POV. You can easily ignore it as a triangle and just label as individual corrective abc waves and trade them that way. We as traders only observe it as a triangle so that we can more easily make sense of the waves and hopefully predict the next move because we know that a triangle has 5 legs and that when the E leg completes, we should see an opposite wave commence. Therefore, we place a trade assuming that opposite wave will occur. That is the only reason we mark a triangle. So when we see something that looks like a triangle, we trade it as a triangle.. I've said many times that I am not a traditionalist when it comes to wave theory. In fact, I won't even consider myself an "Elliottician" as many times, I find fault with "Elliott" wave theory that many times unnecessarily complicates things when a simpler explanation will suffice. "KISS" theory is more important to my trading strategy than Elliott Wave Theory. Like in this case with the triangle I placed in the W position. Can it be in the W position in a WXY complex correction? Answer is Yes, it can but not common. But the point is: why worry about it? Is it a triangle? Well, if it looks like one and trades like one, then it is one. And is there more correction behind it? Yes, there is. So that means the triangle is in the W position then, right? That's all that matters. It doesn't matter whether it SUPPOSED to be in the Y leg or Z leg. It is there and I traded it as a triangle and made good money off of it. That is ALL that matters. If Elliotticians consider that wrong, then does it mean I shouldn't have traded it and made money off of it just because it should not be in the W position? Of course not! This is what is called "trade what you see". It does not matter if it was in the W position or the Y or Z position. Now that does not mean that I don't care at all about the rules and guidelines. Of course, I will try to "fit" the waves correctly into the proper positions according to the wave theory rules so that it makes sense but having the absolute correct wave count is not the most important thing. Being on the right side of the market and making pips is the most important thing. So it I have an inaccurate count but it still leads me to be in the right side of the market, that is what matters.
Hope that makes it more clear to you.
That is actually the purpose of wave theory. To use wave rules and guidelines to hopefully be able to predict the next move and profit from it.
I think I didn't need to say too much, in all your answer is a big help to me, In this heartfelt thanks.
For example, if you look at the weekly or monthly chart of USDJPY, I challenge you to find the previous NFP bars of past months without referring to the date at the bottom of the chart. You can't. So you see that really, the NFP and other "big news" does not have as much as an impact as you might think. Yes, on a daily and hourly basis where most people trade, it does. But the point is, the NFP does not "CHANGE" the direction of the market.